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Canada’s largest cellphone carriers are planning an appeal of certain terms of the code of conduct for wireless players introduced last month.

BCE Inc., Rogers Communications Inc. and TELUS Corp. along with regional players including Manitoba Telecom Service Inc. and SaskTel are set to file a court challenge to the Canadian Radio-Television and Telecommunications Commission’s code specifically taking issue with the timing of when it comes into force and whether it applies retroactively to existing cellphone contracts.

The CRTC announced the code in early June and when it comes into effect on Dec. 2, it will effectively end the practice of three-year wireless contracts because it limits the amortization period for paying off device subsidies to no more than two years.

The carriers are seeking leave to appeal to the Federal Court and the major issue they take is with the code’s provision that it should apply to “all contracts, no matter when they were entered into, by no later than 3 June 2015.”

Since that is less than three years from the date of application of the code, they argue that would mean the code would override the terms of any pre-existing three-year contract that has not yet terminated by then.

In motion materials with Tuesday’s date, the carriers argue that the retrospective application of the code to pre-existing contracts would mean the service providers may not be able to recover the full cost of device subsidies provided to those customers.

“They’ve effectively made the code retroactive to June 3, 2012 for any service we have with customers on a three-year term,” Shawn Hall, a spokesman for Vancouver-based TELUS, said in an interview Wednesday. “That sets a troublesome precedent if the government comes in and makes changes to consumer contracts retroactively.”

He said the carriers behind the motion are seeking clarity from the courts “because we’ve been unable to get satisfactory clarification from the CRTC.”

A tweet from the CRTC’s Twitter account on June 6 said the code “does not apply to contracts signed before Dec. 2, 2013.” On June 12, the Canadian Wireless Telecommunications Association wrote to the regulator seeking its input on whether the policy would in fact apply to contracts entered into before Dec. 2.

On June 18, Barbara Motzney, chief consumer officer at the CRTC, responded in a letter stating based on confidential calculations filed during the hearing, only 20% of wireless customers would still be on unexpired contracts that pre-dated the code by June 3, 2015 and that the commission did intend that to be a mandatory date for its final implementation.

“Consequently after 3 June 2015, early cancellation fees for all wireless contracts will be determined in accordance with the formula set out in the Code,” she wrote.

That would suggest that any customers remaining on three-year contracts at that time could cancel them immediately and imply that at that time the code would in fact apply to contracts pre-dating Dec. 2, 2013.

The industry lobby group posed two specific scenarios where consumers entered into three-year contracts, one in April 2013 before the code was published and a second in October 2013, before it comes into force.

In her responding letter, Ms. Motzney did not directly address what would happen to any remaining portion of device subsidies not paid off by June 3, 2015 in such cases.

A spokesman for the CRTC said Wednesday that since the matter is before the courts now, the commission would not comment.

The major cellphone providers, through their law firm Torys LLP, served the Federal Court motion Tuesday by email on other parties who appeared at or participated meaningfully in the public hearings the CRTC held to consult on the wireless code.

The list of respondents includes the new entrant carriers, individual Canadians who made submissions, public interest groups and government bodies such as the Competition Bureau and the Office of the Privacy Commissioner of Canada.

It is not clear whether the motion materials have yet been filed with the Federal Court itself or when the first court date will be.

The carriers that served the motion argue that the CRTC does not have the jurisdiction to make retrospective rules.

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